Priority Review Vouchers – Not Much Bang for the Buck

A recent article in The RPM Report concerning the apparent fate of the only Priority Review Voucher (“PRV”) issued to date by FDA caught our attention. Kudos to The RPM Report team, which took note of some statements made during a recent meeting of FDA’s Arthritis Drugs Advisory Committee to discuss Novartis Pharmaceuticals Corporation’s (“Novartis’”) supplemental Biologics License Application (“sBLA”) for ILARIS (canakinumab) for the treatment of gouty arthritis attacks in certain patients. According to The RPM Report, during the panel discussion, FDA disclosed that the ILARIS sBLA was granted 6-month priority review status instead of the standard 10-month review: “As part of the explanation, an FDA reviewer noted the distinction between a priority and standard review, adding that Ilaris was an expedited sBLA but not because it was originally designated a priority review by the agency: ‘this one was not necessarily a priority for any unmet need. It was a voucher the sponsor is redeeming.’”

PRVs were established by § 1102 of the 2007 FDA Amendments Act, which created FDC Act § 524. Under the statute, sponsors of certain new drugs and biologics for “tropical diseases” that have received priority review may receive a PRV entitling the holder to a 6-month priority FDA review of another application that would otherwise be reviewed under FDA’s standard 10-month review clock. FDA has granted only a single PRV – in connection with the April 2009 approval of Novartis’ NDA No. 22-268 for COARTEM (artemether; lumefantrine) for the treatment of acute, uncomplicated malaria infections in adults and children weighing at least five kilograms (see our previous post here).

PRVs are transferable and led some people to initially speculate that there would be a PRV market where the value of a PRV would be somewhere between $50 million and $500 million. However, the paucity of PRVs, the mere prospect of saved approval time, and the often unpredictable market for a new drug have not led to the fruition of that speculation. Moreover, FDA has set a high PRV redemption price of $4,582,000 for Fiscal Year 2011. That figure is in addition to the Fiscal Year 2011 full application fee of $1,542,000 that must accompany the submission of an NDA (see our previous post here).

Novartis was apparently willing to pay the PRV redemption fee and roll the dice that FDA would approve the ILARIS sBLA within 6 months of its February 28, 2011 submission. The Arthritis Drugs Advisory Committee voted 11-1 against approval of the ILARIS sBLA. Although FDA is not bound by the advisory committee vote, “[a]ssuming FDA follows that advice, the first [PRV] will end up translating into a faster ‘complete response’ letter—not an earlier launch date for a new product,” says The RPM Report. While such an outcome “does not by itself prove that the voucher incentive is flawed . . . . it will reinforce the concerns of advocates for tropical disease research that the incentive isn’t really doing much to help drive development.”

The case of ILARIS “may be another trigger for a fix to the priority voucher program as part of the PDUFA V reauthorization negotiations on Capitol Hill,” says The RPM Report. Last week, the House Energy and Commerce Committee Health Subcommittee held a hearing on PDUFA V. CDER Director Dr. Janet Woodcock testified at the hearing and identified several proposed enhancements to PDUFA in her prepared testimony, but her prepared remarks did not touch on PRVs. Nevertheless, there is already pending legislation that would change the PRV program, but probably not to the extent needed to address perceived program shortcomings. Earlier this year, the Creating Hope Act of 2011 was introduced in the U.S. Senate (S. 606). The bill, like its nearly identical 2010 version (S. 3697), would, among other things, amend FDC Act § 524 to extend the PRV program to applications for a “rare pediatric disease,” and amend the PRV eligibility requirements for tropical disease applications (see our previous post here).

Finally, we note that on July 11th, David Ridley of the Duke University Fuqua School of Business (and one of the authors to have first proposed in a 2006 Health Affairs article the idea of stimulating tropical disease drug development by offering a voucher system) presented on PRVs (and other issues) at the 8th World Congress on Health Economics in a session titled “The Priority Review Voucher and Other Incentives for Neglected Diseases.” Details on the presentation are not yet available.